Bonds firmer due to global risk-on trade

South African bonds were stronger at midday on Monday amid global risk-on trade after a better-than-expected US nonfarm payroll jobs print on Friday buoyed cheered markets.

The US economy added 287‚000 new jobs in June‚ compared with the forecast of 165‚000 by economists polled by The Wall Street Journal‚ while the May jobs number was revised down to 11‚000 new jobs‚ from 38‚000‚ Dow Jones Newswires reported.

Global investors still do not expect a US interest rate increase anytime soon‚ despite the solid jobs print‚ which led to global risk-on trade.

At 11.36am‚ the benchmark R186 bond was bid at 8.645% and offered at 8.630% from the previous close of 8.700%.

The middle-dated R207 was bid at 8.060% and offered at 8.055% from 8.095% previously.

The rand was trading at R14.5998 to the dollar from R14.5652 to the greenback at its previous close.

In the US‚ bond yields continued to hover around record lows. The yield on the 10-year US Treasury note fell to as low as 1.358% on Monday before recovering slightly‚ while the 10-year German government bond fell to minus 0.199%‚ Dow Jones Newswires reported.

Yields move inversely to prices.

Market focus is now turning to the second-quarter US earnings season‚ which starts with 14 reports this week‚ the newswire said.

— TMG Digital/BDlive